September 22, 2014

Colorado Court of Appeals: Workers’ Compensation Benefits Correctly Reduced by Amount of Social Security Award but No Reduction Allowed for Retirement Benefits from Different Employer

The Colorado Court of Appeals issued its opinion in Zerba v. Dillon Companies, Inc. on April 26, 2012.

Offsetting Social Security Payments Against Permanent Total Disability Benefits—Offsetting Military Retirement Benefits—Equal Protection.

Both parties sought review of the final decision of the Industrial Claim Appeals Office (Panel). The Panel’s decision allowed employer, Dillon Companies, Inc., doing business as King Soopers, to offset the old-age Social Security payments (SSA) received by claimant Robert Zerba against his permanent total disability (PTD) benefits, but denied King Soopers’ request to offset Zerba’s military retirement benefits. The order was affirmed.

Zerba contended that the administrative law judge (ALJ) and Panel erred in granting King Soopers an offset of his SSA benefits against the PTD benefits he was awarded. Specifically, Zerba claimed that this offset disproportionately harms elderly and poor workers by depriving them of the full sum they were receiving when they supplemented their SSA benefits with income. However, Zerba failed to establish that his right to equal protection under the law was violated because the SSA offset has a rational basis and therefore met constitutional scrutiny. Therefore, neither the Panel nor the ALJ erred in determining that King Soopers was entitled to an offset of Zerba’s SSA benefits against the PTD award. Additionally, the ALJ did not abuse its discretion in calculating Zerba’s PTD benefits before offsetting his SSA benefits.

In its cross-appeal, King Soopers contended that the ALJ and the Panel erred in denying it an offset for Zerba’s military retirement benefits. CRS §8-42-103(1)(c)(II.5), however, does not provide for an offset of military retirement benefits because that provision permits an offset only of “employer-paid retirement benefits.” Because King Soopers is not the employer providing Zerba with the retirement benefits in question, it was not entitled to the statutory offset. Therefore, neither the Panel nor the ALJ erred in denying King Soopers’ request for an offset of Zerba’s military retirement benefits.

Summary and full case available here.

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